Duck Creek Technologies Inc., a major software supplier to the insurance indusstry, has agreed to be acquired by Vista Equity Partners for $2.6 billion.
The deal was announced this morning. The $2.6 billion that Vista has agreed to pay for Duck Creek values the software maker at $19 per share, a 46% premium to the Friday closing price of its stock.
Boston-based Duck Creek provides a suite of cloud services that property and casualty insurance providers use to manage their day-to-day business operations. According to the company, insurers rely on its services to process more than 50,000 transactions per day. Duck Creek counts Geico Corp., Liberty Mutual Group Inc. and other major industry players among its customers.
Duck Creek’s cloud services enable insurers to create new insurance offerings through a low-code interface. According to the company, its low-code interface provides the ability to quickly set prices, create rules for how claims should be processed and define other key details. Duck Creek also promises to reduce significantly the amount of work involved in updating the terms of existing insurance plans.
Before rolling out a new insurance plan, Duck Creek customers can use a testing tool provided by the company to detect potential issues. The tool makes it possible to compare different combinations of policy terms and prices.
Besides product development and testing, the company also promises to ease aspects of insurers’ day-to-day business operations.
To streamline insurance claim processing, Duck Creek has built a tool that can automatically collect forms and other data from policyholders. The tool can also approve some claims without the need for manual input. Another feature provided by Duck Creek helps insurers inform the insurance agencies they work with about newly launched offerings.
Alongside its core insurance delivery capabilities, Duck Creek provides a set of data analytics tools. The company says that the tools can be used for tasks such as identifying upselling opportunities in a company’s customer base. Additionally, the software maker provides data governance features that ensure the information an insurer uses as part of its analytics projects is accurate.
“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the advantages they provide this crucial sector of today’s economy,” said Monti Saroya, a senior managing director at Vista Equity Partners and the co-head of its flagship fund.
Duck Creek reported financial results for its fiscal first quarter ended Nov. 30 on Friday. The company’s sales grew 10% year-over-year, to $80.6 million, during the quarter. Its subscription revenue segment, which includes revenue from its flagship cloud services, increased 23% year-over-year.
Vista Equity Partners expects to complete its acquisition of Duck Creek by the end of June. A go-shop provision in the acquisition agreement allows the software maker to seek a higher takeover bids until Feb. 8.
The purchase of Duck Greek is the latest in a series of multibillion-dollar acquisitions made by Vista Equity Partners over recent months. In August, the investment firm acquired tax compliance software maker Avalara Inc. for $8.4 billion. More recently, Vista Equity Partners agreed to buy cybersecurity training provider KnowBe4 Inc. in a $4.6 billion transaction.
Photo: Duck Creek
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